News from the global oil market turned out to be unfavorable for the Russian economy. Brent crude is trading near multi-month lows. It price dipped below the psychological level of 50 US dollars a barrel. Crude prices remain under downward pressure caused by the global oil market oversupply. Oil is still losing in value due to the record US crude stocks and the US decision to maintain its crude output rate. Brent futures declined by 30% to 49.29 US dollars a barrel hitting the lowest reading since January. Light sweet crude contracts lost 46% to 44.69 US dollars a barrel.
Most analysts suppose that crude prices will either consolidate at these levels or fall further as oversupply on the oil market will have a lasting effect on further weakening. Moreover, in June, oil production in OPEC countries touched the highest level in a rather long period of time. Moreover, Iran is ready to return to the market. All these factors are aggravated by economic problems in China, the world’s largest oil purchaser. Low economic growth rate has significantly reduced demand for energy resources. In July, a large decrease was logged in the Chinese manufacturing activity that led to more serious problems after the stock market fall.
